Singapore Post

[CityFarmer]

SP logistic segment op margin has been in a decreasing trend from about 10% to 4% since they bought quatium 4 yrs ago. Last year was the worst and the reason given was more investment to transform the company. Before that, the reason was expiry of job scheme. Didn't have much confident in the execution. Assuming mail segment contribution continue to shrink, logistic margin really need to grow at a much faster pace. At the peak, logistic op contribution was double of last year, but dividend remain at 6.25cents. Highly unlikely that dividend will grow in coming years, although it shoul not shrink either

First of all, SingPost is fall under my No-grow/Slow-grow categories of stock. It means sustainable dividend + good dividend yield is a must. When price reaches "switching" range is a bonus

Let's back to main topic

I agreed mail segment contribution will continue to shrink, but hopefully be as slow as possible

With new management team on board, let's see what wonder can be done with the logistic + retail segments' revenue and margin

One more point to watch is the M&A activities with the current cash reserve. Organic growth of non-mail segments alone may not be sufficient, growth via M&A probably is the better way to go.